Current through Reg. 49, No. 38; September 20, 2024
(a) Introduction.
The Texas Health and Human Services Commission (HHSC) uses the methodology
described in this section to establish rate increases to the direct care staff
component base rate for nursing facility services while limiting the use of
funds received by the provider through these increases. This section describes
the spending requirements associated with receiving the rate increases and
circumstances in which recoupments will be necessary for a provider's failure
to meet those requirements.
(b)
Definitions. The following words and terms, when used in this section, have the
following meanings, unless the context clearly indicates otherwise.
(1) Direct care staff base rate--The direct
care staff base rate is calculated in accordance with §
355.308(k) of this
subchapter (relating to Direct Care Staff Rate Component before September 1,
2025).
(2) Direct care staff cost
center--This cost center will include compensation for employee and contract
labor Registered Nurses (RNs), including Directors of Nursing (DONs) and
Assistant Directors of Nursing (ADONs); Licensed Vocational Nurses (LVNs),
including DONs and ADONs; medication aides; and nurse aides performing
nursing-related duties for Medicaid contracted beds.
(3) Nursing care staff base rate--The nursing
care staff base rate is calculated in accordance with §355.318(d) of this
subchapter (relating to Reimbursement Setting Methodology for Nursing
Facilities on or after September 1, 2025).
(4) Rate year--The standard rate year begins
on the first day of September and ends on the last day of August of the
following year.
(5) Responsible
entity--The contracted provider, owner, or legal entity that received the
revenue to be recouped is responsible for the repayment of any recoupment
amount.
(c) Eligibility.
To receive and retain rate increases under this section, the provider must be
contracted with HHSC or a managed care organization (MCO) to provide nursing
facility services through the Medicaid program.
(d) Direct Care Staff Base Rate Increase.
Effective September 1, 2023, HHSC will increase the direct care staff base rate
for nursing facility services for each Resource Utilization Group (RUG),
Version III (RUG-III) case-mix group by an amount that is proportional to the
level of the direct care staff base rate for each RUG-III case-mix group in
effect on August 31, 2023. The direct care staff base rate increases will be
limited to available state and federal appropriated amounts provided for the
direct care base rate increase. The direct care rate increase will be applied
proportionally to the level of each nursing component payer group under the
Texas-specific patient driven payment methodology once that methodology is
implemented.
(e) Spending
Requirements for providers. Providers are subject to a direct care staff cost
center spending requirement with recoupment calculated as follows.
(1) At the end of the rate year, HHSC will
calculate a direct care staff base rate spending floor by multiplying accrued
Medicaid fee-for-service and managed care direct care staff revenues
proportional to the direct care base rates effective on August 31, 2023 by
0.70, for each provider.
(2)
Accrued allowable Medicaid direct care staff expenses for the rate year will be
compared to the base rate spending floor from paragraph (1) of this subsection.
If the base rate spending floor is less than the accrued allowable Medicaid
direct care staff expenses, HHSC or its designee will notify the provider as
specified in subsection (g) of this section. There will be no recoupment
associated with a provider's failure to meet the direct care base rate spending
floor specified in this paragraph.
(3) At the end of the rate year, HHSC will
calculate the direct care spending floor by multiplying accrued Medicaid
fee-for-service and managed care direct care staff revenues proportional to the
direct care staff rate increases specified under subsection (d) of this section
by 0.90 and the direct care staff base rate spending floor as specified in
paragraph (1) of this subsection.
(4) Accrued allowable Medicaid direct care
staff expenses for the rate year will be compared to the total direct care
staff spending floor from paragraph (3) of this subsection. If the direct care
spending floor is less than the accrued allowable Medicaid direct care staff
expenses, HHSC or its designee will recoup the difference between the direct
care spending floor and the accrued allowable Medicaid direct care staff
expenses from providers whose Medicaid direct care staff spending is less than
their direct care spending floor.
(5) At no time will a provider's direct care
rates after recoupment be less than the direct care base rates in effect prior
to the direct care staff base rate increase established under this
section.
(6) For participants in
the direct care staff enhancement program. HHSC will calculate spending
requirement as specified under §
355.308 of this
subchapter.
(f) Reporting
Requirements. Providers receiving the direct care rate increases established
under this section must report their direct care revenues and spending to HHSC
or its designee in a manner and frequency prescribed by HHSC. HHSC will use
cost reports or staffing and compensation reports (accountability reports)
requested to comply with the direct care staff enhancement program as specified
in §
355.308 of this subchapter to meet
the requirements of this section if applicable. Providers must also report
information related to the use of funds, including information related to
efforts to improve or maintain client care and quality of services on their
biennial cost reports, as specified by HHSC. All reports must be completed in
accordance with the provisions of §
355.102 of this chapter (relating
to General Principles of Allowable and Unallowable Costs), §
355.103 of this chapter (relating
to Specifications for Allowable and Unallowable Costs), §
355.104 of this chapter (relating
to Revenues), and §
355.105 of this chapter (relating
to General Reporting and Documentation Requirements, Methods, and Procedures)
and may be reviewed or audited in accordance with §
355.106 of this chapter (relating
to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).
All reports must be completed by preparers who have attended the required
nursing facility cost report training, as per §
355.102(d) of this
chapter.
(g) Notification of
recoupment, appeals, and repayment requirements.
(1) The estimated amount to be recouped for a
provider's failure to meet spending requirements as specified under subsection
(e) of this section will be indicated in the State of Texas Automated
Information and Reporting System (STAIRS) or successor system. STAIRS will
generate an email to the entity contact, indicating that the facility's
estimated recoupment is available for review. If a subsequent review by HHSC
results in additional adjustments to the report, as described in subsection (f)
of this section, that results in a revised recoupment amount, HHSC will notify
the provider's entity contact via email of both the report adjustments and
revised recoupment amount are available in STAIRS for review.
(2) Informal reviews and formal appeals
relating to these reporting requirements in subsection (f) of this section are
governed by §
355.110 of this chapter (relating
to Informal Reviews and Formal Appeals).
(3) HHSC or its designee will recoup any
amount owed from the facility's vendor payments that are being held following
the initial or subsequent notification date. In cases where funds identified
for recoupment cannot be repaid from the held vendor payments, the responsible
entity from subsection (b) of this section will be jointly and severally liable
for any additional payment due to HHSC or its designee. Failure to repay the
amount due or submit an acceptable payment plan within 60 days of notification
will result in the recoupment of the owed funds from other Medicaid contracts
controlled by the responsible entity, placement of a vendor hold on all
Medicaid contracts controlled by the responsible entity, and barring of new
contracts. The vendor hold will bar the responsible entity from receiving any
new contracts with HHSC or its designees until repayment is made in full. The
responsible entity for these contracts will be notified as described in
paragraph (1) of this subsection prior to the recoupment of owed funds,
placement of vendor hold, and barring of new contracts.
(h) Change of ownership. When there is a
change of ownership before the end of a rate year, the prior owner must submit
a report covering the period from the beginning of the rate year to the date
recognized by HHSC or its designee as the ownership-change effective date to
meet reporting requirements under subsection (f) of this section. The new owner
may be responsible for the reporting requirements in subsection (f) of this
section for any reporting period days after the change of ownership effective
date to the end of the rate year as specified by HHSC or its
designee.
(i) Vendor hold. HHSC or
its designee will place on hold the vendor payments for any participating
facility that does not submit a timely report as described in subsection (f) of
this section in accordance with §
355.403 of this subchapter
(relating to Vendor Hold).
(j)
Aggregation. For an entity, commonly owned corporation, or combined entity that
controls more than one participating nursing facility contract, compliance with
the spending requirements detailed in subsection (e) of this section can be
determined in the aggregate for all nursing facility contracts controlled by
the entity, commonly owned corporations, or combined entity in accordance with
aggregation requirements specified in §
355.308(aa) of
this subchapter.
(k) Transition to
Patient Driven Payment Model (PDPM) for Long-Term Care (LTC). Effective
September 1, 2025, HHSC will utilize the PDPM LTC reimbursement methodology for
nursing facilities as described in §355.318 of this subchapter. HHSC will
adopt new rates for PDPM LTC with the intent of supporting the new
classification system and maintaining the September 1, 2023, direct care rate
increases as part of the nursing rate component. HHSC will hold providers
accountable to nursing care staff spending requirements under the PDPM LTC as
follows.
(1) HHSC will transition direct care
rates to the nursing component under PDPM LTC as follows.
(A) HHSC will calculate a nursing component
base rate as specified in §355.318 of this subchapter. The nursing
component base rate will be proportional to the direct care rate component
revenue effective August 31, 2023 and any additional revenue appropriated for
direct care.
(B) HHSC will
reallocate the portion of the direct care component of the RUG-III rates
associated with increases effective September 1, 2023, described in subsection
(d) of this section, to the nursing rate component of the PDPM LTC rates.
Reallocation will be proportional based on the case-mix indices (CMI)
applicable to the nursing case-mix classifiers.
(2) Nursing care staff base rate spending
floor under PDPM LTC will be calculated as follows.
(A) HHSC will calculate a nursing care staff
base rate spending floor by multiplying accrued Medicaid fee-for-service and
managed care nursing care staff revenues proportional to the nursing staff base
rate specified in paragraph (1)(A) of this subsection by 0.70 for each
provider.
(B) Accrued allowable
Medicaid nursing care staff expenses for the rate year will be compared to the
base rate spending floor from subparagraph (A) of this paragraph. If the base
rate spending floor is less than the accrued allowable Medicaid nursing care
staff expenses, HHSC or its designee will notify the provider as specified in
subsection (g) of this section. There will be no recoupment associated with a
provider's failure to meet the nursing care base rate spending floor specified
in this paragraph.
(3)
Total Nursing Care Spending Floor will be calculated as follows.
(A) At the end of the rate year, HHSC will
calculate the nursing care spending floor by multiplying accrued Medicaid
fee-for-service and managed care nursing care staff revenues proportional to
the nursing care staff rate increases specified in paragraph (1)(B) of this
subsection by 0.90 and the nursing care staff base rate spending floor as
specified in paragraph (2)(A) of this subsection.
(B) Accrued allowable Medicaid nursing care
staff expenses for the rate year will be compared to the total nursing care
staff spending floor from subparagraph (A) of this paragraph. If the nursing
care spending floor is less than the accrued allowable Medicaid nursing care
staff expenses, HHSC or its designee will recoup the difference between the
nursing care spending floor and the accrued allowable Medicaid nursing care
staff expenses from providers whose Medicaid nursing care staff spending is
less than their nursing care spending floor.
(4) At no time will a provider's nursing care
rates after recoupment be less than the nursing care base rates as defined in
paragraph (1)(A) of this subsection.
(5) For participants in the nursing care
staff enhancement program, HHSC will calculate spending requirements as
specified under §355.320(k) of this subchapter (relating to Nursing Care
Staff Rate Enhancement Program for Nursing Facilities on or after September 1,
2025).
